Smith machine is very popular in the gym. With the supported cables and weights this can help people feel safe and the belief is that you can get more activation in the chest (able to lift more weight).
A study was conducted in the California state university, Northridge by jared coburn and found that a free weight bench press causes greater activation of the medial deltoid compared to the Smith machine bench press at 70 to 90 % maximal effort (1 – rep max)
However there was no difference in the activation in the anterior deltoid or pectoralis major muscles. The study was conducted with electromyography. The study also found that the smith machine also could place abnormal stress on joints and may increase the risk on injury due to the specific bar path during the exercise (which I personally can attest to as my wrists feel sore during the smith machine but not on normal bench press.)
(sources: Journal Strength Conditioning Research, 24: 779-784, 2010 and http://www.musculardevelopment.com/articles/training/2739-free-weights-cause-greater-muscle–